Google buys 'smart' thermostat maker Nest for $3.2 bn

Larry Page, Google co-founder and CEO, speaks during the opening keynote at the Google I/O developers conference on May 15, 2013 in San Francisco, California

Google on Monday announced that it is buying smart thermostat start-up Nest in a deal valued at $3.2 billion.

"They're already delivering amazing products you can buy right now -- thermostats that save energy and smoke/CO alarms that can help keep your family safe," Google chief executive Larry Page said in a press release.

"We are excited to bring great experiences to more homes in more countries and fulfill their dreams."

The big-ticket buy continues a move by the California-based Internet titan into consumer electronics hardware, adding smartphone-synched thermostats to its Motorola Mobility smartphones; Nexus mobile devices, Chromecast, and the promise of releasing Google Glass eyewear some time this year.

"Google has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services for the home globally," Nest co-founder and chief executive Tony Fadell.

"And our company visions are well aligned – we both believe in letting technology do the hard work behind the scenes so people can get on with the things that matter in life."

Nest co-founder Tony Fadell is a former senior vice president of the Apple division behind iPods and iPhones. Fellow co-founder Matt Rogers was a lead iPod software engineer working with Fadell at Apple.

Nest's vice president of technology Yoky Matsuoka was once head of innovations at Google.

Tony Fadell, Founder and CEO of Nest, talks during the opening session of LeWeb12 on December 4, 2012 in Saint-Denis, near Paris

Inspiration for Nest came when Fadell was building an environmentally-friendly home in Northern California and discovered that thermostat technology was stuck in a bygone era. Fadell pulled together a team to bring the thermostat into the mobile Internet age.

The sleek, disk-shaped thermostat is controlled by turning an outer ring. A black display screen showing the temperature turns blue to indicate cooling or red to show rooms are being heated.

Machine learning built into thermostats lets them adapt to patterns in homes within a week of regular use. The more users adjust their Nest thermostats, the more precisely the devices learn preferred comfort levels in homes.

Sensors in the thermostat assess whether lights are on or there is movement, determining when people are away and then shifting to energy-saving settings.

A green leaf appears on-screen to prompt users to save energy and money by altering their usual thermometer setting by a barely noticeable degree.

Learning Thermostats also tell people how long it will take to get rooms to desired temperatures, letting them assess whether they will be home long enough to justify the process.

Nest thermostats have Wi-Fi connectivity to link up to the Internet, and a free smartphone application lets people manage home climates from afar or mine data about energy used for heating or cooling.

Nest launched in late 2011 with its smart thermostat and later added a carbon dioxide detector to its line.

"This means firmly and clearly that Google is getting into connected homes," Forrester analyst Frank Gillett said of the acquisition.

"It once again demonstrates that the industry is going in the direction of Apple; deciding it is darn important to control the hardware."

"Smart" homes, featuring "intelligent" objects such as door locks, lamps, refrigerators and washing machines, were among the hot trends at an international Consumer Electronics Show extravaganza that ended on Friday in Las Vegas.